Help! These breakouts are killing me

Quote from Handle123:

And what have you learned "Grasshopper"? If a couple trades have you are a "total mess", it isn't the markets you are at a loss, it is your loss of confidense based on whatever you did for backtesting. Since I started in 1978, slow was my middle name back then when you had to chart by hand, you were forced to learn Price Action and there wasn't any kind of day trading as costs were $125 for buying 100 shares, so investing was long term in nature.

You have to ask yourself are you a trader, keeping stocks short term, investor & keeping for months to years, or dividend investor-buying for income. When you are drawing trendlines on a stock that is "basing" over a few months, and most of the time out of basing is upside price action, this leads into a move that normally into holding periods of months to years. I really thought your charts looked long term, so why do you even care about the news since you are drawing trendlines? None of your reasoning of getting into the trades offered about the finances of the company.

There really aren't any "tricks' to trading, there is however, education, which is only learned by great amount of study. And when one speaks of "edge" that is different as to degree of years of study as That transforms as years go by. What I once thought a great entry was my edge is not as important as my Money management rules being most important, and my edge is ultimate disipline to apply them. Getting the edge for me has been in stages of over 30,000 hours of screen time, over 100,000 trades and have no clue the hours of backtesting of myself and others.

My method of trading stocks is using weekly bars, (entries on dailies) very slow, only check on weekends. I wait for basing and draw trendlines, wait for breakout then retracement and if it goes back up, I buy. Real hard, real boring and look to reward many times over the risk, often times reward to risk is over 10 to 1.

Day trading is quite the opposite, where often times, one is in trades for minutes, and must keep losing trade percentage very low and risk for me is always greater than reward, so I have to keep losing to a min. Ave trade varies between $15 to $37, so I has to do quantity to make it worth while. Where averaging down is refrained upon in stock trading, day trading when you concentrate on making systems where there is small losing %, taking more contracts with price against original entry for me works in my favor.

But there is litterally thousands of different ways to enter and exit, just pick one to start and concentrate all efforts on the getting out and the "whys." I always learned the most from the winning trades. And I have learned much from these forums through the years from it's members, but you have to read much to find those who actually work at trading and make a living at this.

Good Luck.
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I like what you have shared but you may have broken dreams of some of the traders who have bought into the REAL THING math regarding day trading.

However, as we all know there are many ways to skin a cat. I wonder why traders at SMB capital or T3 live trade differently than REAL THING math as an example?

I am using these 2 firms examples as their traders trade LIVE and if someone is good enough they may want to go through their selection process to see where they stand. They do not have to work for them. Go through their selection process, get an offer and DECLINE the offer.

How sweet is THAT?

It's not like an offer from Goldman Sachs but an offer from SMB capital or better from First New York securities will not be a BAD offer to DECLINE .

Here is one of First New York securities trader courtesy of Business Insider.

One can click on the link and read about SMB capital trader Gman- he is not trading the way REAL THING math suggest. One can follow Gman trades if one choose to. Most of it will not make sense as he is TAPE READER and it takes some time and resources to get to that level.



"A year ago we called Adam Guren — age 28 — the Lebron James of trading. Given his consistent success like King James, Adam was the obvious choice for the top spot on our first annual list.
After graduating Duke in 2003, Adam played professional soccer for a season with the Cleveland Force before starting in the prestigious training program at First New York Securities. After a 14 month apprenticeship, Adam started trading his own book while expanding his focus from Europe to Asia.
Now, Adam focuses on global stocks. His day looks much like a British colonel’s when the sun never set on the British Empire. But with patience and discipline, Adam finds a way to replicate his success in multiple markets. He starts his process by logging on premarket. Then he spends approximately an hour, sometimes thirty minutes, seeing if there’s news out in the basket of stocks he follows. This is how he figures out if there’s any opportunities because he looks for newsworthy events that are going to move his stocks.
When I asked Adam about how he makes his moves, he said:
I’m not a technician and I really don’t study charts. That’s not to say I won’t look at them to see where things are. At the same time, I’m not a big fundamental guy based on the nature of how long I hold a position. I mean, I do understand the fundamentals of each stock and what people generally expect, but for the most part I rely heavily on intuition and the feel I have for a stock based on watching it for so long. After watching the same 50-100 names, you start to easily understand how they trade and what moves them. It’s pattern recognition.
Another key to Adam’s success is his risk management:
Every trade I get into I have a very good understanding of the risk-reward. One of the keys to success is measuring risk-reward. And one of the best ways to do that, as elementary as it sounds, is to buy low and sell high. So you want to buy when things are beat up and sell when things are overdone on the upside. I’d say I do a good job of measuring risk. It’s probably one of the main reasons why I am successful at trading.
Although this sounds very basic, it’s obviously easier said than done. Given that over 85% of traders lose money, Adam has proven that mastering the fundamentals is the key to success as a professional trader.
If you would like to nominate traders for future awards, please send us an email or comment below.


Read more: http://www.businessinsider.com/meet...der-first-new-york-securities-3#ixzz1kCEpJTVv
 
Quote from 1a2b3cppp:

I also used to lose money when I tried to predict market direction.

The markets are set up so that most people lose.
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HAHAHAHAHAHA

thats the most stupidest thing i have ever read here.

HAHAHAHAHAHA

You should ask yourself the question what is the market.
If you find the answer one day, you will see what a stupid comment this was.

Only people are set up so that they lose.

HAHAHAHAHAHA
 
Quote from shopster:


writing down your trading rules is step one.
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Based on your various posts, I can see that your niche is most likely taking the short side when overleveraged retail traders puke them out.

Quote from shopster:


back testing is useless as the market is simple, stupid and irrational, all at the same time.
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This may be true for your style of trading.
 
Quote from Matt Houston:

And I appreciate your advice, but you are coming across as a prick, I hope you take that onboard too.

I admit all my shortcomings, all you had done is repeat everything I have already stated myself. I don't intend to make a living out of trading, but I am quite confident I can make some money from it. Sorry if that upsets you.

Thanks for you time
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The best option is to stick at your regular job, then learn about passive index investing via a diversified portfolio of low-cost funds (e.g. Vanguard). Split something like 60% stocks 10% gold 30% bonds, and rebalance once a year. Contribute 10-20% of your income each month into this investment pool. Avoid all short-term trading with these funds, just automatically stay in the market diversified between 2-3 asset classes.

Then, take 5-10% of your savings and use it as 'play' money to speculate in the markets. If you suck, eventual you will lose it all. If you become good, eventually you will turn it into a larger sum. Either way, you are better hedged - if you suck, you still keep 90% of your net worth and learn a valuable lesson, and you will make 6-8% per annum with acceptable risk from your passive index fund portfolio. If you get good, your 'play' money will gradually become more than your investment money, and eventually you'll be a full time pro.

Both options are far better than pissing away your earning power and savings in your prime wealth-creating years on nothing more than a wing and a prayer.
 
Good advice. This is what I have been doing for years. I just wish the play money would make something one of these times...

ES

Quote from Ghost of Cutten:

The best option is to stick at your regular job, then learn about passive index investing via a diversified portfolio of low-cost funds (e.g. Vanguard). Split something like 60% stocks 10% gold 30% bonds, and rebalance once a year. Contribute 10-20% of your income each month into this investment pool. Avoid all short-term trading with these funds, just automatically stay in the market diversified between 2-3 asset classes.

Then, take 5-10% of your savings and use it as 'play' money to speculate in the markets. If you suck, eventual you will lose it all. If you become good, eventually you will turn it into a larger sum. Either way, you are better hedged - if you suck, you still keep 90% of your net worth and learn a valuable lesson, and you will make 6-8% per annum with acceptable risk from your passive index fund portfolio. If you get good, your 'play' money will gradually become more than your investment money, and eventually you'll be a full time pro.

Both options are far better than pissing away your earning power and savings in your prime wealth-creating years on nothing more than a wing and a prayer.
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Quote from NoDoji:

Triangle breakouts on volume are great setups, IMHO. I think you've laid a good foundation by choosing a setup with positive expectancy.



Here's the root of your problem: Your trading plan is based on technical analysis and price action, yet you were reading market news and took a detour from your plan based on news/opinion.

Your trade management plan is based on TA/PA, so news is irrelevant because news will be reflected in the price action.

MSFT broke out and was consolidating prior to its earnings call. 1/19 after hours earnings call was interpreted positively and it broke out again. If the earnings news was interpreted negatively, it would've gapped down and sold off (notice I use the word "interpreted"; news in and of itself is meaningless, it's the interpretation of the news by market participants that moves price). In that case, you would have been stopped out.

Does your trading plan have a filter for earnings calls? When I put on a swing trade, I make note of the next earnings call and a decision in advance as to whether I plan to hold or close out before the announcement. In a volatile instrument, I'd likely close out or hedge my position; in less volatile instruments (such as MSFT) I may choose to hold.

You have regrets because you violated your trading plan and because the result was negative to your potential profit. If MSFT had gapped down and sold off, would you still be upset that you closed the position based on your opinion? Probably not, but you should be, because it would still have been a violation of your plan UNLESS your plan included a filter for earnings calls.

Your personality may be better suited to a two-tiered profit target on your trades, based on next support/resistance levels in line to be tested (or average breakout moves if a breakout to an all-time new high or low is in play).

Hope that helps a bit!
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This is a great post.
 
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